Post Tagged with: "Spain"
Argentina is not the model
There have been a lot of people talking about Argentina as if it were the model for other governments in sovereign difficulty to follow. Yes, Argentina’s decision to default was realistically the right call given the crushing debt load. And that is the path the euro zone periphery is on. But, beyond this, I fail
Spain has replaced Greece and Portugal as the chief source of market anxiety
Rising tensions in Europe continues to be a dominant force in the foreign exchange market, with the euro briefly dipping below the $1.30 level for the first time since mid-February
LTRO operation is pushing Spanish banking system closer to collapse
I thought I’d point out that the already severely undercapitalised Spanish banking system is being crushed by the spike in Spanish sovereign yields. I continue to expect Europe to continue the extend and pretend approach, creating volatility and crisis. But in the end the issue will always be the same as to who writes the check
[Premium] Daily Commentary: On Spain’s Insistence It Will Not Need A Bailout
I am increasingly worried about what is happening in Spain. It seems that the crisis there is hitting a flashpoint with no obvious means of turning things around. Over the past few days, I have been reading and listening to Spanish media assiduously. Here is what is happening there based on my review
[Premium] Daily Commentary: The Pain in Spain
Spain has really hit the wall now. Given what we know of how the sovereign debt crisis has proceeded. The likelihood that Spain can escape from the rise in yields without ECB or EU-wide intervention is slim
When Virtuous Cycles Turn Vicious
The LTRO’s provided more than 1 trillion euros of liquidity. An under-appreciated aspect of the virtuous cycle, was the bank balance sheets improved not just because of cheaper cost of capital, but because there was a significant rally in the banks’ assets–ie sovereign bonds. Now things are in reverse and the virtuous cycle is becoming vicious
Chart of the Day: Flight to safety – German Bunds edition
The German 2-year note has dropped below Japan’s for the first time ever, with the German 2-year note yielding 0.109%, a record low. Japan’s 2-year note yield is 0.111%. Meanwhile, the 10-year bund is at 1.638%, nearing the record low of 1.636% from September
[Premium] Spain is in big trouble
This week’s weekly commentary on markets and the economy features Spain. In my view, the potential for downside economic and portfolio risk has increased markedly as we realise that Spain is at risk and there is no plan B in the euro zone. Here, I frame what the real economic issues in Spain are and what the economic outcomes are likely to be
Italy’s debt is its biggest obstacle but Spain’s budget lacks credibility
The more Spanish officials talk about the budget the less credible it seems. The 10-year yield fell 11 bp on Friday when the budget first presented before the weekend. Now as more detail emerge as it goes to parliament, 10-year yields are rising. Italy reported that the Q1 state sector deficit declined by about 10% to 28.2 bln euros in Q1. This was completed due to the results in the month of March. Contrary to the conventional narrative about fiscal profligacy on the periphery, Italy’s fiscal policy has been among the tightest in the euro zone as it is one of the few countries that can point to a primary budget surplus. But Italy has to run hard to stay in the same place
On Spain’s Budget With Details Tomorrow
Banks, households and the government sector are all engaged in deleveraging. It is difficult to see where aggregate demand will come from. Spanish exports in January were up about 4% from a year ago, but the pace appears to be leveling off. Spain’s stock market is the worst performing in the euro zone thus far this year, losing 6.1% and 10-year bond is the worst performing bond in the euro zone thus far as well. The risk is downside on growth and upside on the deficit
[Premium] Daily commentary: On Spanish and Irish austerity
I had intended my commentary here to be on US interest rates but i have already written that (silver level) post. So I will refer you there. Instead, I will mention Europe again because the links are filled with European stories
[Premium] What developments in Spain and the Netherlands mean for European policy outcomes
I have a number of links coming up in today’s daily commentary. The likely topic will be US interest rates. But there is a second topic I wanted to riff on so I am posting here separately about fiscal woes in Spain and the Netherlands